2 February 2016


BUY NIFTY ABOVE 7470 TG 7499,7530 SL 7640”
SELL BANKNIFTY BELOW 15150 TG 15000,14800 SL 15400”
Market languishes in red..!!! The sixth bi-monthly policy meet turned out to be a non event as the RBI kept key interest rate unchanged which was in line with market expectations. After a rally on Friday and a tumble from highs on Monday, the indices remained choppy as ever slipping sharply on Tuesday.  The Reserve Bank of India (RBI), in its Sixth Bi-monthly Monetary Policy Review, 2015-16, has decided to keep the repo rate same, opting to wait for the government’s annual budget statement at the end of February for further easing, with no pulls or pressure from the market. Governor Raghuram Rajan declared that the Repo Rate will be maintained at 6.75%, with CRR at 4%. Reverse Repo Rate is held at 5.75%. The Sensex finally ended with a loss of 285 points at 24539. It opened at 24868, touched an intra-day high of 24929 and low of 24461. The Nifty ended with a loss of 100 points at 7456. It opened at 7567 hitting a high of 7576 and low of 7428. The market was largely digesting the announcement which was wide in-line expectation. But a slip in the European market due to fall in crude prices has impacted Indian equities. Globally investors are shunning risky assets like oil, equities and commodities.
The Nifty is stuck inside a range between 7420 and 7550. Key resistances are at 7620 and 7650. Only a decisive break above 7650 will boost the sentiment and take the contract higher. As long as the contract trades below 7420, it is likely to remain range bound between 7400 and 7550 for a few sessions. A breakout on either side of 7400-7600 will give a clear cue on the next leg of move. In any case, unless the bulls are able to take out 7620 – 7650 range by tomorrow, it would be quite unlikely that there would be further upside in the current pullback attempt. However, once that is taken out expect even 7700 level to be taken out as well. Only when you see that happening, you can carry on with buy side momentum. Immediate support for the contract is at 7390. A break below this level can drag the contract lower to 7350 and 7300 level. Traders can wait for the contract to bounce back and go short near 7350. Stop-loss can be kept at 7410 for the target of 7290.
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Resistances: 7,500 , 7,550
Support: 7,400, 7,350

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